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USA Mobility Reports Third Quarter Operating Results; Board Declares Special Dividend on Common Stock
Subscriber and Revenue Trends Continue to Improve Merger Integration Substantially Complete Bank Debt Repaid, Company Debt Free

ALEXANDRIA, Va., Nov 09, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging services, today announced operating results for the third quarter ended September 30, 2005 and a special dividend of $1.50 per share payable in December. USA Mobility was formed on November 16, 2004 by the merger of Arch Wireless, Inc. and Metrocall Holdings, Inc. USA Mobility's historical financials are those of Arch Wireless, which was deemed the accounting acquirer in the merger.

Reported revenue for the third quarter of 2005 was $152.0 million, compared to $109.4 million in the third quarter of 2004, with the increase due entirely to the inclusion of Metrocall revenue for the quarter ended September 30, 2005. Third quarter revenue decreased 3.5% from $157.5 million reported for the second quarter of 2005.

Reported net income for the third quarter was $355,000, or $0.01 per fully diluted share, compared to net income of $6.7 million, or $0.34 per fully diluted share, in the third quarter of 2004.

USA Mobility reported a reduction of 232,000 units in service in the third quarter. Units in service totaled 5,116,000 at September 30, 2005, with 4,342,000 direct units in service and 774,000 indirect units in service. One- way units in service at the end of the third quarter totaled 4,662,000 while two-way units in service totaled 454,000. Average revenue per unit for the quarter was $9.04, with revenue per direct unit in service of $9.81 and revenue per indirect unit in service of $4.81.

"We continue to see positive trends in the rate of unit and revenue decline," said Vincent D. Kelly, president and chief executive officer. "Unit losses of 232,000 during the third quarter compared to 272,000 during the second quarter, 347,000 in the first quarter and 388,000 in the fourth quarter of 2004 (reflecting the inclusion of Metrocall for the entire quarter). This is an improvement in the sequential rate of decline from 6.1% to 5.8% to 4.8% to 4.3% over the past four quarters. In addition," Kelly noted, "third quarter revenue declined 3.5% compared to a decrease of 4.9% in the second quarter. Although current trends do not predict future results, we are very encouraged by these quarterly results."

Kelly also noted that USA Mobility made significant progress during the quarter toward completing its merger integration goals. Key achievements included further consolidation of the company's operating and management structure, repositioning of the company's sales and marketing strategy, and making substantial progress in network rationalization, including the decommissioning of the Arch two-way network and most notably a long-term master site lease agreement with Global Signal, Inc. that is expected to greatly reduce USA Mobility's network costs. "We have spent the first half of the year integrating the operations of the two companies in order to create a low cost operating platform with which to service our customers and generate cash flow. More recently we have focused on longer-term strategic initiatives on both the revenue and cost side of our business. While we cannot share every detail of our plans with you for competitive and other reasons, we look forward to providing more information at an investor meeting we plan to host in the first quarter of 2006 in New York City. We will provide the exact date and details of the meeting in the coming months."

Thomas L. Schilling, chief financial officer, said the company continued to improve its financial position in the third quarter. "During the quarter we repaid the remaining $26.5 million balance on our bank credit facility, resulting in a debt free balance sheet and enhanced financial flexibility," he said. "In addition, our cash balance at September 30th was $43.3 million."

Kelly added: "As a result of our current and projected cash position at year end, our Board of Directors has declared a special one-time dividend of $1.50 per common share, to be paid on December 21, 2005 to shareholders of record on December 1, 2005." Kelly said the Board has made no determination on future uses of cash beyond the one-time dividend, "but we will regularly evaluate our options for returning capital to shareholders based on the company's operating performance and future capital investment requirements."

Among other highlights of the third quarter, Kelly noted, was the company's outstanding performance in the immediate aftermath of Hurricanes Katrina, Rita and Wilma. "Due to the reliability of our networks as compared to competing wireless services, plus the preparedness of our technical and customer support teams in the field, we were able to provide one-way and two- way paging and text-messaging services when most other wireless networks had not yet been restored," Kelly said. "As a result, hundreds of emergency service responders -- including hospitals, utilities, police, firefighters and government agencies -- were able to maintain critical communications. We also supplied thousands of additional pagers to federal, state and local emergency response organizations to help respond to the crisis. While these disasters were devastating for those affected," Kelly added, "we were pleased to do our part."

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its third quarter results at 11:00 a.m. Eastern Time on Thursday, November 10, 2005. The call-in number is 866-802-6730 (toll-free) or 913-643-4200 (toll). The pass code for the call is 3544544 (followed by the # sign). A replay of the call will be available from 3:00 p.m. Eastern Time on November 10 until 11:59 p.m. Eastern Time on Wednesday, November 23. The replay number is 888-203- 1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 3544544 (followed by the # sign).

* * * * * * * * *

About USA Mobility

USA Mobility, Inc., headquartered in Alexandria, Virginia, is a leading provider of paging products and other wireless services to the business, government, healthcare and emergency response sectors. USA Mobility offers traditional one-way and advanced two-way paging via its nationwide networks covering more than 90% of the U.S. population. In addition, the company offers mobile voice and data services through Nextel, Sprint and Cingular/AT&T Wireless, including BlackBerry and GPS location applications. The company's product offerings include wireless connectivity systems for medical, business, government and other campus environments. USA Mobility focuses on the business-to-business marketplace and supplies mobile connectivity solutions to over two-thirds of the Fortune 1000 companies. For further information visit http://www.usamobility.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility's expectations for future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility's actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, the timely and efficient integration of the operations and facilities of Metrocall and Arch as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.

Contact:
     Bob Lougee
     (703) 721-3080

    Tables to Follow

                               USA MOBILITY, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                                          December 31, 2004 September 30, 2005
                                                                  (Unaudited)
                          ASSETS
    Current assets:
      Cash and cash equivalents                     $46,995           $43,323
      Accounts receivable, net                       37,750            43,424
      Prepaid rent, expenses and other               15,460            13,823
      Deferred income tax assets                     26,906            26,309
        Total current assets                       $127,111          $126,879
      Property and equipment, net                   216,508           155,853
      Goodwill                                      151,791           148,799
      Intangible assets, net                         67,129            45,631
      Deferred income tax assets                    225,253           216,109
      Other assets                                    5,517             4,815
        TOTAL ASSETS                               $793,309          $698,086

             LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Current maturities of long-term debt          $47,558               $14
      Accounts payable and other accrued
       liabilities                                   76,420            76,152
      Customer deposits                               4,316             3,427
      Deferred revenue                               23,623            19,929
        Total current liabilities                  $151,917           $99,522
      Long-term debt, less current
       maturities                                    47,500               -
      Other long-term liabilities                    10,555            12,276
        TOTAL LIABILITIES                          $209,972          $111,798
    Stockholders' equity:
      Preferred stock                                    -                 -
      Common stock                                        3                 3
      Additional paid-in capital                    554,946           558,898
      Retained earnings                              28,388            27,387
      TOTAL STOCKHOLDERS' EQUITY                    583,337           586,288
      TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY                                      $793,309          $698,086



                                USA MOBILITY, INC.
                   CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
         (unaudited and in thousands, except share and per share amounts)


                                  Three Months Ended      Nine Months Ended
                                    September 30,           September 30,
                                   2004        2005        2004        2005
    Revenue:
      Service, rental and
       maintenance, net of
       service credits           $104,785    $145,014    $335,505    $455,647
      Product sales                 4,632       6,940      13,368      19,521
        Total revenue             109,417     151,954     348,873     475,168

    Operating expenses:
      Cost of products sold           691         945       2,485       3,153
      Service, rental and
       maintenance                 36,904      54,607     112,880     167,685
      Selling and marketing         7,862      11,276      25,687      32,834
      General and administrative   27,438      44,783      87,523     140,405
    Depreciation and
     amortization                  22,302      27,327      79,682      98,751
    Stock based compensation        1,865          76       6,185       2,155
    Severance and related
     termination costs              1,228       1,050       5,374      16,026
        Total operating expenses   98,290     140,064     319,816     461,009

    Operating income               11,127      11,890      29,057      14,159
    Interest expense, net              71         (18)     (4,958)     (1,731)
    Loss on extinguishment of
     long-term debt                   -          (312)        -        (1,338)
    Other income, net                  66          76         411         297
    Income (loss) before
     income tax expense            11,264      11,636      24,510      11,387
    Income tax expense             (4,527)    (11,281)     (9,852)    (12,388)
    Net income (loss)              $6,737        $355     $14,658     ($1,001)

    Basic net income (loss)
     per common share               $0.34       $0.01       $0.73      ($0.04)
    Diluted net income (loss)
     per common share               $0.34       $0.01       $0.73      ($0.04)

    Basic weighted average
     common shares outstanding 19,914,099  27,365,701  19,967,708  27,234,214
    Diluted weighted average
     common shares outstanding 20,041,555  27,411,639  20,091,801  27,234,214



                              USA MOBILITY, INC.
               CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                         (unaudited and in thousands)


                                               Nine Months Ended September 30,
                                                     2004              2005
    Cash flows from operating activities:
      Net income (loss)                            $14,658           ($1,001)
      Adjustments to reconcile net income
       (loss) to net cash provided by
       operating activities:
        Depreciation and amortization               79,682            98,751
        Amortization of deferred financing
         costs                                          -                714
        Amortization of stock based
         compensation                                2,065             2,155
        Income tax expense                           9,852            12,388
        Loss on extinguishment of long-term
         debt                                           -              1,338
        Gain on disposals of property and
         equipment                                    (240)              (30)
        Provisions for doubtful accounts,
         service credits and other                   7,349            17,221
      Changes in assets and liabilities:
        Accounts receivable                         (2,452)          (23,154)
        Prepaid expenses and other                  (5,182)            2,039
        Intangibles and other long-term
         assets                                         -              2,911
        Accounts payable and accrued expenses      (16,427)           (2,692)
        Customer deposits and deferred
         revenue                                    (6,081)           (4,583)
        Other long-term liabilities                  4,083            (5,768)
    Net cash provided by operating
     activities                                    $87,307          $100,289

    Cash flows from investing activities:
      Purchases of property and equipment          (15,328)           (9,515)
      Proceeds from disposals of property
       and equipment                                 1,675               259
      Receipts from note receivable                    168               259
    Net cash used for investing
     activities                                   ($13,485)          ($8,997)

    Cash flows from financing activities:
        Repayment of long-term debt                (60,000)          (95,044)
        Proceeds from exercise of options               -                 80
        Purchase of treasury shares                 (3,112)               -
    Net cash used for financing
     activities                                   ($63,112)         ($94,964)

    Net decrease in cash and cash
     equivalents                                   $10,710           ($3,672)
    Cash and cash equivalents, beginning
     of period                                      34,582            46,995
    Cash and cash equivalents, end of
     period                                        $45,292           $43,323
    Supplemental disclosure:
        Interest paid                               $6,709            $2,210
        State income taxes paid                         $0              $465



                              USA MOBILITY, INC.
           PRO FORMA AND ADJUSTED UNITS IN SERVICE ACTIVITY (a) (b)
                        units in thousands (unaudited)


                                                        Three Months Ended
                                                   March 2004        June 2004
    Direct     One-Way:
             Beginning units in service              5,329             5,100
             Gross placements                          226               181
             Disconnects                              (455)             (372)
             Ending units in service                 5,100             4,909

               Two-Way:
             Beginning units in service                506               483
             Gross placements                           40                32
             Disconnects                               (63)              (53)
             Ending units in service                   483               462

    Indirect   One-Way:
             Beginning units in service              1,716             1,474
             Gross placements                          157               145
             Disconnects                              (399)             (366)
             Ending units in service                 1,474             1,253

               Two-Way:
             Beginning units in service                131               123
             Gross placements                           20                16
             Disconnects                               (28)              (18)
             Ending units in service                   123               121

    Total
             Beginning units in service              7,682             7,180
             Gross placements                          443               374
             Disconnects                              (945)             (809)
             Ending units in service                 7,180             6,745

    Adjusted Proforma ARPU
             Direct One-Way                          $9.10             $8.96
             Direct Two-Way                         $25.15            $24.68
             Indirect One-Way                        $4.06             $4.26
             Indirect Two-Way                       $12.89            $12.07
             Total                                   $9.15             $9.16


                                                      Three Months Ended
                                              September 2004     December 2004
    Direct     One-Way:
             Beginning units in service           4,909                 4,690
             Gross placements                       182                   166
             Disconnects                           (401)                 (392)
             Ending units in service              4,690                 4,464

               Two-Way:
             Beginning units in service             462                   449
             Gross placements                        35                    29
             Disconnects                            (48)                  (56)
             Ending units in service                449                   422

    Indirect    One-Way:
             Beginning units in service           1,253                 1,101
             Gross placements                       160                   143
             Disconnects                           (312)                 (257)
             Ending units in service              1,101                   987

                Two-Way:
             Beginning units in service             121                   115
             Gross placements                        20                     7
             Disconnects                            (26)                  (28)
             Ending units in service                115                    94

    Total
             Beginning units in service           6,745                 6,355
             Gross placements                       397                   345
             Disconnects                           (787)                 (733)
             Ending units in service              6,355                 5,967

    Adjusted Proforma ARPU
             Direct One-Way                       $8.89                 $8.75
             Direct Two-Way                      $24.22                $23.93
             Indirect One-Way                     $4.12                 $4.26
             Indirect Two-Way                    $11.30                $10.41
             Total                                $9.14                 $9.09


                                                    Three Months Ended
                                               March        June    September
                                                2005        2005        2005
    Direct     One-Way:
            Beginning units in service         4,464       4,273       4,114
            Gross placements                     141         134         125
            Disconnects                         (332)       (293)       (262)
            Ending units in service            4,273       4,114       3,977

               Two-Way:
            Beginning units in service           422         397         382
            Gross placements                      22          29          17
            Disconnects                          (47)        (44)        (34)
            Ending units in service              397         382         365

    Indirect   One-Way:
            Beginning units in service           987         859         762
            Gross placements                     107          92          26
            Disconnects                         (235)       (189)       (103)
            Ending units in service              859         762         685

               Two-Way:
            Beginning units in service            94          91          90
            Gross placements                       7           7           3
            Disconnects                          (10)         (8)         (4)
            Ending units in service               91          90          89

    Total
            Beginning units in service         5,967       5,620       5,348
            Gross placements                     277         262         171
            Disconnects                         (624)       (534)       (403)
            Ending units in service            5,620       5,348       5,116

    Adjusted Proforma ARPU
            Direct One-Way                     $8.65       $8.61       $8.48
            Direct Two-Way                    $23.98      $23.65      $24.28
            Indirect One-Way                   $4.07       $4.11       $4.36
            Indirect Two-Way                   $9.16       $8.71       $8.42
            Total                              $9.01       $9.02       $9.04

    (a) Assumes Arch and Metrocall combined as of January 1, 2004 and the
        unit in service adjustment reflected in March 2004.
    (b) Amounts have been adjusted for rounding.

SOURCE USA Mobility, Inc.

Bob Lougee for USA Mobility, Inc., +1-703-721-3080

http://www.prnewswire.com